With Passage of The Inflation Reduction Act, Millions May See Prescription Cost Savings

With Passage of The Inflation Reduction Act, Millions May See Prescription Cost Savings

Signed by President Joe Biden on Aug. 16, the act allows Medicare to start negotiating the price of medications
Man going thru his prescriptions

After months of speculation and debate, President Joe Biden signed the Inflation Reduction Act on Tuesday, ushering in new rules and regulations that may help millions of Americans pay for life-saving medication.

The act, which also includes goals to help combat climate change, allows Medicare to negotiate the price of 100 drugs over the next decade, specifically targeting brand-name drugs that don’t have generic equivalents. Drug manufacturers that fail to comply with negotiations will be subject to taxes and fees. The Inflation Reduction Act will also require drug companies to offer rebates on brand-name drugs without generic equivalents when their prices increase faster than inflation, or if they cost $100 or more per year.

The act will also extend Affordable Care Act subsidies enacted in the American Rescue Plan Act of 2021 that were supposed to sunset at the end of 2022. Middle-income Americans who buy their own health insurance (at an average rate of $541 for a 40-year-old) will continue to have access to premium tax credits and bolstered subsidies through 2025.

According to the White House, 5 million to 7 million Medicare beneficiaries may see their prescription drug prices decrease in the coming years. For those with Medicare Part D, pharmacy costs will be capped at $2,000 per year (or about $167 a month) by 2025, and the price of insulin for those with Medicare will be capped at $35 per month by 2023. That could have a major impact on those who require the drug to survive, especially as current insulin prices skyrocket. The measure also eliminates cost-sharing for vaccines under Medicare in 2023, meaning they will be free for recipients.

The landmark measure is beneficial for some, but may leave others struggling

Medicare, however, is usually only open to those who are age 65 or older, younger people with disabilities and people with End Stage Renal Disease. The requirement to negotiate also isn’t slated to take effect until 2026, leaving plenty of Americans struggling to cover the cost of medications in the meantime.

And if you currently get your health insurance through your employer rather than the marketplace, there aren’t any provisions in the act that will impact you.

Luckily, there are steps you can take to reduce your health care costs:

1. Price shop medical costs, if possible

Before you get a medical procedure or service, such as a vaccination or surgery, you have the option to shop around. This can be extremely helpful for those who are strapped for cash but require medical treatment. And, thanks to the ​​Hospital Price Transparency rule, hospitals are required to provide a clear list of prices for many services. Your doctor may also be able to give you recommendations on cheaper alternatives that can help you avoid taking on medical debt.

For more urgent needs, asking about discounts for upfront payments can also help you save.

2. Ask for an itemized explanation of any medical bills

Getting a hefty medical bill in the mail can feel overwhelming, especially after an unexpected illness or injury. You’re faced with a large sum of money, and if you aren’t in a position to pay that, you might start worrying about your options. But before you pay, it’s worth asking for an itemized version of the bill so that you can make sure that every cost is counted correctly. Mistakes like double-billing or inaccurate insurance reimbursement can happen. And once you know about them, you can talk to the medical billing office to get those removed.

3. Negotiate your charges

A medical bill is not set in stone, even if it’s 100% accurate to the services you received. You can negotiate those charges to a more affordable figure. For example, you may be able to work out a payment plan, rather than having to pay the full amount all at once. Or you may be able to get a discount on the amount in exchange for a down payment.

4. Look into assistance programs

There are several options for getting lower-cost health care, which can range from federal programs like Medicaid, the Extra Help program and the Children’s Health Insurance Program (CHIP), to more local options, like state- or county-run assistance programs. These can be especially helpful for households with low income. But there may also be options from your own hospital or clinic. The National Consumer Law Center (NCLC) offers a guide for patients with low income who need to lower hospital bills via those kinds of financial assistance programs.

Outside of those options, you may consider private organizations that offer assistance, as well as no- to low-cost health care, like: